By TIOL News Service

MUMBAI, AUG 31, 2017: A CE duty demand of Rs.26.71 lakhs in respect of goods allegedly removed clandestinely was confirmed against the appellant assessee and penalty of Rs.20 lacs on Shri Pankaj Jaju, penalties of Rs.15,000/- each on Victor Industries, Crown Industries, Unique Trading Corporation and Suman Bardia were imposed under rule 26 of CER. Apparently, the SCN demanded CE duty of nearly Rs.42 lakhs .

In the first round of appeal by the assessee before Tribunal, the matter was remanded to the original authority.

In denovo adjudication, the CCE, Goa confirmed the duty demand of Rs.42 lacs and imposed penalty of Rs.25 lacs on Pankaj Jaju under Rule 26, Rs. 2 lacs on Unique Trading Corporation and Rs.15,000/- each on Victor Industries, Crown Industries and Suman Bardi a.

All the appellants are before the Tribunal for the second time. Since the main appellant, the assessee, did not comply with the order of pre-deposit their appeal was dismissed.

The appeals of the other noticees against whom penalties were imposed were heard and decided recently.

The appellant(s) submitted that in view of the remand ordered by the CESTAT in the first round of appeal, the adjudicating authority was supposed to re-adjudicate the demand to the extent of Rs.26.71 lacs which he had confirmed initially whereas the AA had reopened entire case and confirmed the demand of Rs.42 lacs and imposed penalties on some of the appellants on the higher side. And for this reason itself, penalties imposed on the present appellants cannot survive.

In the matter of appeal of Pankaj Jaju , it is emphasized that since no charge of confiscation of the goods was made, penalty could not have been imposed u/r 26 of CER[ Castrol India - 2007-TIOL-1826-CESTAT-MUM refers]. So also was the case in respect of the other appellants as no role of these persons was established by any corroborative evidences that they had belief that they had dealt with the goods which was liable for confiscation.

The AR supported the order of the CCE, Goa .

The Bench observed –

+ Even though Tribunal has remanded the matter, the adjudicating authority was supposed to decide the matter related to the demand of Rs.26.71 lacs only, for the reason that demand which was dropped by the Commissioner was not challenged by the Revenue, therefore, dropping the said demand attained finality.

+ As regard the role of Shri Pankaj Jaju, I observe from the order that he was actively involved in the entire operation being Executive Director of M/s Sunrise Zinc Ltd. In the statement of Shri R.K.Mishra, General Manager of the M/s Sunrise Zinc Ltd., he stated that clandestine removal of zinc ingots and other goods was made as per the direction of Shri Pankaj Jaju which was subsequently corroborated by the statement of Shri Pankaj Jaju himself.

+ In the findings given in para 51.4, it is clearly held that Shri Pankaj Jaju knows and had reason to believe that goods were liable for confiscation, therefore, he was liable for penalty under rule 26.

+ As regards the penalties on the other persons, they are not related to the company who has indulged in the clandestine removal i.e. M/s Sunrise Zinc Ltd. However, they were involved in dealing with the goods which were cleared clandestinely, therefore, their involvement is not direct but indirect involvement was very much established.

+ Since the duty should not have been confirmed to the tune of Rs.42 lacs, the penalty commensurate to the said amount is also not proper. I, therefore, reduce penalty…

The Appeals were partly allowed.

(See 2017-TIOL-3161-CESTAT-MUM)